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Transport in 2018 - Five top priorities

The transport sector is going through a period of major upheaval with technical and digital innovations approaching thick, fast and driverless. However, some old issues are not going away.

Here are five key areas that the Department for Transport (DfT) should consider over the coming 12 months in order to clear its intray for new world that lies just over the horizon.

(If anyone would like to add to this please comment below).

1. Fewer funding streams?

Would anyone like to take a guess at how many discrete funding pots there are just for local roads?

There is actually some debate, which is in itself worrying. Just taking some of the main funding elements there is the highways maintenance block grant, the integrated transport block grant, the revenue support grant, the challenge fund, the incentive element, the pothole fund and the local growth fund and out of that fund there is the large local majors spending. Oh and there is also the national productivty fund. Oh and...

These funds come from different places and departments and some require councils to bid for them.

In 2015 the RAC Foundation stated: 'The sheer complexity of arrangements for the funding of local transport activities – with its variety of grants and grant recipients – is quite striking. It is hard to see how anyone could establish with any degree of confidence what the prospects are for future local roads maintenance expenditure.'

Little has changed since then. And it's not just getting hold of the money that is complicated: spending it is suprisingly difficult too.

The chair of ADEPT engineering board and director, highways and transport at Wiltshire County Council, Parvis Khansari, explained: 'There is certain routine maintenance for highways you can only pay for from revenue. If you don't have the money the roads will break up. You can only fix that from capital. Then you have to borrow capital to pay for that and you repay the capital through revenue. If you were inventing the world today there is no way you would come up with those rules.'

Remember all this is just for local roads. A cynic might say this system benefits both Sir Humphrey in Whitehall, by bewildering politicians, and the politicians themselves, who enjoy endlessly reannouncing funding from different streams, safe in the knowledge that many will not notice that the same cash was announced the week before for something else. Cash from the Local Growth Fund for instance could be announced as part of roads spending and as part of active travel spending to get people out of cars.

While this might all seem good fun in central government, the result out in the real world is needless complexity and confusion that sucks money out of actual delivery. Who will show leadership and create a proper programmed approach to infrastructure spending, and then have the courage to just leave the situation alone for five years and let public bodies get on with the job?

2. A major bus network for Britain or Mobility as a Service?

Transport Network was impressed by David Quarmby and Phil Carey’s A Major Road Network for England. It did several very important things very well and put forward an eminently sensible and straightforward argument with supporting evidence.

Looking at the coverage of our underfunded road network, both national and local, it formed an equation to analyse just how ‘strategic’ an individual road is. One could do this in a number of ways of course but traffic volume and nature is a sensible starting point.

It then suggested providing dedicated funding to help support these most strategic of roads. The Government has taken the idea up.

We now need to start a similar data-driven debate around wider transport connectivity. One place we could start, as something of a proxy for local transport in general, is the bus network. All around the country services are falling off. Communities are being left stranded and in some areas, in parts of Wales in particular, the whole industry looks on shaky ground, with companies folding and councils scrambling to fill the gaps.

While the bus market has changed little over years since privatisation, society has changed an enormous amount. The DfT could consider doing some analysis of exactly where strategic bus networks are needed and how this transport need could be supported. An equation that combines population size, jobs, access to key services and distances to be travelled could be a starting point to protecting a viable national network as well as a basis for a wider debate around Mobility as a Service.

It could create a benchmark that regional transport bodies and local authorities could use to draw up franchising arrangements or provide subsidy to privately controlled networks. It could also provide the start of data analysis that could provide a better more real time link between passengers and operators - just like the consumer transport apps local authorities have become involved in.

The whole world can’t have a bus pick them up at their door, but while providers such as Uber offer interesting disruption the Government must be aware of the risks of handing over transport policy.

This is not to say new ideas won’t come from new areas and we should be open to them but as the former head of digital transformation at the DfT, Sir Nic Cary, said the public sector must embrace new ways of working or risk being ‘controlled from California by a series of software businesses’.

3. Rail that gives a ticket to ride?

The frustrations over rail ticketing and franchise arrangements have gone on for too long. Transport for London can run a perfectly effective contactless payment system across different modes and operators while also providing fare capping. Our national rail system, bogged down by byzantine regulations, discrete monopolies on different lines, massive infrastructure renewal programmes; fragmented, complex and downright poor franchise arrangements and – believe it or not – tight margins seems incapable of replicating this nationwide.

It is easy to slam the rail companies, but if you look beyond the frustration on the platform the picture is not as simple as greedy bosses fleecing the public. Take, for instance, the recent report by the independent National Audit Office on GTR’s Southern franchise – the top contender for most disliked rail service in the country.

The NAO found that GTR (the franchise holder) was responsible for 60% (88,000) of all cancelled and significantly late trains, with staff unavailability, including industrial action, and the condition of some train fleets as contributing factors. However Network Rail’s management of the network and failures in the infrastructure caused 37% of this type of disruption.

The report also lays much of the responsibility for the disruption on the DfT, which designed and let the contract.

There are in fact myriad issues that the public are not really aware of that lie well beyond the responsibility of operators. For instance, how many trains are late because lorry drivers hit low rail bridges, meaning the track has to be closed? It happens a lot but those people waiting for trains on the platform understandably only blame the operator.

The Labour alternative is focused on nationalisation. However, nationalisation is not without its issues. It would take a long time and be expensive to deliver in the first instance, and is not without a high degree of risk to the public purse and reputation. Critically, no matter what the issues around private ownership, it has delivered one of the world’s safest rail networks. Nothing can be allowed to interrupt that.

It is also fair to say that the power and control over networks and services already largely rests with the state. The Government can draw up rail contracts however it wants, and given some tweaks to legislation, is more than capable of setting fares, service levels and all other key aspects of the business.

True, rail companies resist potential improvements like part-time season tickets, and plead that any such drastic changes could tip profit margins into the negative. While this situation is frustrating, these companies are not charities and have every right to make this case. It is more for government to find a way through the issue.

What is needed is nothing less than an overhaul. One way forward, as we have argued before, is devolution. By allowing services to be procured at a local/commuter level, bringing local understanding to the table and allowing local areas to operate as test cases for new forms of ticketing, the sector, working together as a whole, can try to develop the understanding that allows passengers to be given the fairest prices for the distances they travel, while also allowing whoever operates the service to balance capital and revenue, supply and demand, investment and surpluses.

4. Revenue for roads?

It is a point that often seems lost on national politicians, who love cutting ribbons, but every transport asset is useless unless you have the money to maintain it. All transport can be seen as a battle between capital and revenue. It seems that local highway authorities, managing some 98% of the network, have an almost impossible balancing act and are often left managing decline for want of revenue cash.

In the absence of a fair funding deal, the roads sector has to turn to other options. For the last few years capital may have been winning, but revenue is about to make a comeback.

What if roads became revenue neutral? Let’s start with a more important question, one we have asked before; what is a road?

As a starter for 10, it is a source of access to all services and the entry source for all data on the physical movement of people and goods, a place of energy and information transmission, generation and distribution, the bedrock of the automotive, oil, rubber and health services, a place with potentially unlimited Wi-Fi access and an absolutely enormous supply of oil and stone. In this day and age, that is a capital asset that can generate revenue.

The key question for any sector like roads, which is facing disruption, is what is your core value? Roads are lucky in the self-evident fact that no economy is likely to thrive for the foreseeable future without good highways. That is a hard business model to shift. However we can and must go further. If we find ways to balance capital and revenue by raising revenue income, it could answer the ‘core value’ question for the sector, time and again.

The data the sector holds, the assets it maintains and the almost unlimited demand, either direct or derived, for its services must be put to use to boost margins and square funding gaps. Ask not what you would pay for roads, but what you would pay for from the roads service.

5. An air quality solution that gives us breathing space?

Council directors’ body ADEPT has redefined ‘place’ as more than just infrastructure. It is about creating successful, and indeed happy, communities. The people we write for did not build this country and do not maintain it from below the ground right up to the skyline, every day, just to have people choke to death in the streets.

Equally, infrastructure cannot operate with this sword of Damocles hanging over its head. The Government has already delayed its decision on the Silvertown Tunnel project’s planning application amid concerns over its impact on air pollution. Is anyone willing to bet their house that Heathrow won’t be stalled or stopped by something similar?

There is no easy solution that won’t cause some level of discomfort. The good news is that the entire world and its governments are waking up to environmental issues and sustainability, from using less plastic to banning new petrol and diesel cars from 2040.

The Government's recently unveiled 25-year environment plan states: 'The UK’s determination to improve air quality is reinforced by our commitment to meeting ambitious, legally-binding targets to cut emissions of five pollutants – ammonia, nitrogen oxides, non-methane volatile organic compounds, fine particulate matter and sulphur dioxide – by 2020 initially, and by 2030 for a deeper cut. Our commitment to meeting these legally binding targets is not affected by the UK’s departure from the EU.'

It adds that it plans to publishing a new Clean Air Strategy this 2018.

A main sticking point to the previous strategy, which was defeated in court by ClientEarth, was the surface transport element and the Government's reluctance to impose charging measures on drivers of polluting vehicles to help bring levels of pollution back within legal limits as soon as possible.

Ministers have now issued ministerial directions to the five councils in the most polluted areas outside London requiring them to produce a 'full business case' for Clean Air Zones.

Despite the Government's protestations to the contrary there are fears that it sees Brexit as a way of escaping the cycle of – let’s be honest – losing to ClientEarth every six months over air quality plans. This would be short-sighted.

If government was to duck the hard issues and kick the can down the road, it would be mortgaging the lives of future generations. No one expects miracles overnight, but we do expect clean air. A government that cannot lay out a proper framework to deliver this in a sensible amount of time, must ask itself whether it is worthy of the name.